Reassessment notices issued beyond the surviving limitation period under TOLA and Section 148 are time-barred.

The Petitioner challenged an order passed under Section 148A(d) and a consequential notice issued under Section 148 of the Income Tax Act, 1961 ("the Act") for Assessment Year (AY) 2013-2014

Originally, the Respondent issued a reassessment notice on June 24, 2021, under the pre-amendment regime, utilizing the time extension provided by the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance/Act, 2020 (TOLA)

Following the Supreme Court’s decision in Union of India v. Ashish Agarwal, that notice was deemed a show-cause notice under the new Section 148A(b)

The Respondent provided relevant information to the Petitioner on May 27, 2022, and the Petitioner submitted a reply on June 11, 2022

The Assessing Officer subsequently passed the impugned order and issued a fresh Section 148 notice on July 28, 2022

1. Whether the notice issued under Section 148 of the Act is time-barred and invalid based on the "surviving time" principle established by the Supreme Court

2. Whether the reassessment proceedings for AY 2013-2014 are sustainable when the final notice was issued beyond the limitation period prescribed under the Act read with TOLA and judicial precedents

The Court applied Sections 148 and 148A of the Income Tax Act, 1961, as amended by the Finance Act, 2021

It relied on the landmark Supreme Court rulings in Union of India v. Ashish Agarwal (2022), which converted old-regime notices into Section 148A(b) notices

Union of India v. Rajeev Bansal (2024), which defined the "surviving time" doctrine

Under this doctrine, reassessment notices must be issued within the remaining limitation period available under the Act (read with TOLA) after excluding the time during which proceedings were deemed stayed by judicial intervention

The Court also followed its own coordinate bench decision in Dhanraj Govindram Kella v. Income Tax Officer regarding the specific calculation of limitation for AY 2013-14

The Court examined the timeline to calculate the "surviving time" available to the Revenue

For AY 2013-2014, the limitation period was extended by TOLA until June 30, 2021

The initial notice was issued on June 24, 2021, meaning only a few days of the limitation period remained

Following the Ashish Agarwal directions, the Revenue provided information on May 27, 2022, and the Petitioner’s reply period ended on June 11, 2022

By applying the calculation standards set in Rajeev Bansal, the Court determined that the deadline to issue the final Section 148 notice—after accounting for the "surviving time"—was June 21, 2022

Since the Respondent issued the impugned notice only on July 28, 2022, the Court found that the action was taken after the limitation period had expired

Consequently, the Court quashed and set aside the order under Section 148A(d) dated July 28, 2022, the notice under Section 148 dated July 28, 2022, and all consequential reassessment proceedings for AY 2013-2014